Figuring out if you have a good deal or not

[Heather Thuli]

I am so close to being ready to get my first wholesale deal.  The only problem is I am struggling a lot to figure out if it is a good deal or not.  I am looking at on-market properties. I feel like every time I see a potential house I have the repair price too high, but I could be off on my repair cost.  Any tips for me? Thanks!

[Ryan Lockstein]

Crazy debate over the 70% rule in this thread. I use it all the time in practice and get most of my deals around that figure. It's not a hard rule for me but a great starting place for a newby. If you can get a deal for 70% of ARV you almost always have a deal, seems silly to me not to teach it as a good starting guideline.

As for your question on repair cost estimates this is how I do it.......  Speak to a few very active local rehabbers  and ask them what they are paying per sqft on average to do a full gut rehab and also a cosmetic rehab on the type of property you are looking to contract.  Once you have that figured out you can easily calculate a rough construction budget using the square footage and condition of the property you are trying to value.   Hope that helped.